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2012 - Year of the Political Economy

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mlkrborn   Friday, 01/13/12 09:20:47 AM
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2012 - Year of the Political Economy
Last update: 1/13/2012 9:00:00 AM
--Slower Growth Expected for First Half of 2012 Compared to Fourth Quarter of 2011; Second-Half Growth Projected to Trend Modestly Higher --Housing Sector Showing Incremental Improvement Due to Modest Pick-Up in Employment
WASHINGTON, Jan. 13, 2012 /PRNewswire via COMTEX/ -- Fiscal policy issues and political economic uncertainty will take center stage in determining the degree of consumer and business activity - key drivers of economic growth - during 2012, according to Fannie Mae's (FNMA) Economics & Mortgage Market Analysis Group. The forthcoming presidential election, potential expiration of tax provisions for businesses and households, and the ongoing healthcare debate are among the uncertainties expected to keep the economy moving at a moderate pace with growth of 2.3 percent expected for the year. Moreover, contagion effects from the sovereign debt crisis in the euro zone, which appears to be slipping into recession, are expected to remain as a primary risk to growth in 2012.
Consumers seem to have gotten out of their summer rut due in large part to improving labor market conditions and improving attitudes toward employment prospects and future income. As consumer sentiment shows signs of improvement, so do recent housing indicators, which are trending in a positive direction with incremental improvement expected to continue throughout 2012 - albeit only modestly initially, and moving from historic lows.
"We're entering 2012 with decent momentum, especially on the employment side, which is fostering positive household and consumer behavior. Unfortunately, we expect this momentum to slow as we move through the first half of the year," said Fannie Mae Chief Economist Doug Duncan. "2012 will be replete with policy changes and challenges that involve the global economy, the domestic economy, and the housing sector. We expect the net effect will be a year of moderate growth edging away from the 2011 threat of a double dip."
For an audio synopsis of the January 2012 Economic Outlook, listen to the podcast on the Economics & Mortgage Market Analysis site at . Visit the site to read the full January 2012 Economic Outlook, including the Economic Developments Commentary, Economic Forecast, Housing Forecast, and Multifamily Market Commentary.
Opinions, analyses, estimates, forecasts, and other views of Fannie Mae's Economics & Mortgage Market Analysis (EMMA) Group included in these materials should not be construed as indicating Fannie Mae's business prospects or expected results, are based on a number of assumptions, and are subject to change without notice. How this information affects Fannie Mae will depend on many factors. Although the EMMA Group bases its opinions, analyses, estimates, forecasts, and other views on information it considers reliable, it does not guarantee that the information provided in these materials is accurate, current, or suitable for any particular purpose. Changes in the assumptions or the information underlying these views could produce materially different results. The analyses, opinions, estimates, forecasts, and other views published by the EMMA Group represent the views of that group as of the date indicated and do not necessarily represent the views of Fannie Mae or its management.
Fannie Mae exists to expand affordable housing and bring global capital to local communities in order to serve the U.S. housing market. Fannie Mae has a federal charter and operates in America's secondary mortgage market to enhance the liquidity of the mortgage market by purchasing or guaranteeing mortgage loans originated by mortgage bankers and other lenders so that they may lend to home buyers. Our job is to help those who house America.
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Copyright (C) 2012 PR Newswire. All rights reserved

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